Reply #2: When will people realize that the stock market is not our friend [View All]

[Idealism]

The 401k's are decimated, and thats the only way most Americans are invested in the market.

Stocks go up when companies make better than expected profits per quarter. They make better than expected profits by (i) producing their goods more efficiently and/or undercutting their competitors- which is hard to do for any length of time, (ii) improving their profit margin- usually by cutting hours or firing workers, or (iii) creating a new, desired product and bringing it to the market.

The easiest of these options is the second- cut hours, employees, benefits, etc.

Hard to think of a new product that people will love that hasn't been done, hard to get greater production out of workers for any sustained periods... but not hard to fire people.

All of these things make the stock go up, because the company's profits go up- which makes the market go up. These things are not good for the workers who had their hours cut or lost their job at the expense of stock holder and corporate profits.